Cash rate to stay at record low of 2.00% for another month

With domestic economic growth remaining below the long-term average, the Reserve Bank felt that leaving the cash rate unchanged is the best course of action at this month’s board meeting.

Governor Glenn Stevens of the RBA also released a statement highlighting the favourable credit environment at the moment: “Low interest rates are acting to support borrowing and spending. Credit is recording moderate growth overall, with stronger lending to businesses and growth in lending to the housing market broadly steady over recent months. Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities.”

So, what does all this mean for you? The property boom continues. With money being cheap to borrow, the time may be right for you to acquire the investment property that you want before property generally becomes too expensive.

Should interest rates rise, people will lose interest in borrowing to acquire and the excess supply of available properties may exceed the demand for those properties and eventually prices will fall. But this is only a problem if you plan to sell soon. Long term investors can revel in the low interest rates as it offers a once-in-a-decade opportunity to acquire at low interest rates; lock in now and reap the benefits. Should rates rise later in 2015, now is the time to consider whether your current loan is the right one for you. It may be time to lock in, if not all, at least part of your borrowing.